ITO 25 (3)(3), Mumbai v. RAJAN NANALAL SHANGHVI, Mumbai

ITA 4919/MUM/2019 | 2009-2010
Pronouncement Date: 09-03-2021 | Result: Dismissed

Appeal Details

RSA Number 491919914 RSA 2019
Assessee PAN AAEPS4098N
Bench Mumbai
Appeal Number ITA 4919/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 13 day(s)
Appellant ITO 25 (3)(3), Mumbai
Respondent RAJAN NANALAL SHANGHVI, Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 09-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 09-03-2021
Last Hearing Date 09-03-2021
First Hearing Date 09-03-2021
Assessment Year 2009-2010
Appeal Filed On 25-07-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH MU MBAI BEFORE SHRI SHAMIM YAHYA AM AND SHRI RAM LAL NEGI JM ITA NO. 4919/MUM/2019 (ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER-25(3)(3) ROOM NO. 233 2 ND FLOOR KAUTILYA BHAWAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400 051 VS. RAJEN NANALAL SHANGHVI B-701 SWAPNALOK DIXIT ROAD VILE PARLE (E) MUMBAI-400 057 PAN/GIR NO. AAEPS 4098 N ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI BHARAT ANDHLE RESPONDENT BY : MS. KINJAL BHUTA DATE OF HEARING : 09.03.2021 DATE OF PRONOUNCEMENT : 09.03.2021 O R D E R PER SHAMIM YAHYA A. M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-37 MUMBAI (L D.CIT(A) FOR SHORT) DATED 29.05.2019 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y .) 2009-10 WHEREIN FOLLOWING PENALTY LEVIED U/S.271(1)(C) HAS BEEN CONFIRMED AS UNDER: ASSESSMENT YEAR AMOUNT OF PENALTY 2009-10 RS.59 390/- 2. BRIEF FACTS OF THE CASE LEADING TO THE LEVY OF P ENALTY ARE THAT THE ASSESSING OFFICER IN THIS CASE MADE DISALLOWANCE OF 15% ON ACCOUNT OF BOGUS PURCHASES. ASSESSEE HAS SUPPLIED THE PURCHASE VOUCHERS AND THE PAYMENT WHER E SHOWN TO HAVE BEEN MADE BY BANKING CHANNEL. HOWEVER DRAWING ADVERSE INFERENCE FOR THE NON-PRODUCTION OF THE SUPPLIERS THE A.O. DISALLOWED 15% OF THE BOGUS PUR CHASES. HOWEVER THE A.O. DID NOT DOUBT THE SALES. THE LD. CIT(A) REDUCED THE ADDITIO N. ITAT REDUCED THE DISALLOWANCE TO 5%. PENALTY U/S. 271(1)(C) WAS ALSO LEVIED. THE LD. CIT(A) DELETED THE PENALTY BY HOLDING THAT PENALTY ON EXTENDED ADDITION IS NOT SUSTAINABL E. HE RELIED ON SEVERAL CASE LAWS IN THIS REGARD. 2 ITA NO. 4919/MUM/2019 (ASSESSMENT YEAR: 2009-10) 3. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AS CLEAR FROM THE FACTS RECORDED ABOVE THE DISALLOWANCE HAS BEEN MADE ON A N ESTIMATED BASIS ON ACCOUNT OF THE NON PRODUCTION OF SUPPLIERS BEFORE THE ASSESSING OF FICER. THE PURCHASE VOUCHERS WERE DULY PRODUCED AND THE PAYMENTS WERE THROUGH BANKING CHANNEL. IN THIS BACKGROUND IN OUR CONSIDERED OPINION THE ASSESSEE CANNOT BE VISI TED WITH THE RIGORS OF PENALTY U/S. 271(1)(C) OF THE ACT. AS A MATTER OF FACT ON MANY OCCASIONS ON SIMILAR CIRCUMSTANCES IN QUANTUM PROCEEDINGS THE DISALLOWANCE ITSELF HAS BE EN DELETED. IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASS ESSEE CANNOT BE SAID TO HAVE BEEN GUILTY OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICUL ARS OF INCOME. IN THIS REGARD WE DRAW SUPPORT FROM THE DECISION OF A LARGER BENCH OF THE HONBLE SUPREME COURT COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [1972] 83 ITR 26 (SC) WHEREIN IT WAS HELD THAT THE AUTHORITY MAY NOT LEVY THE PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMAC IOUS. 5. WE FURTHER NOTE THAT TAX EFFECT IN THIS CASE IS BELOW THE LIMIT FIXED BY CBDT FOR FILING APPEALS BEFORE ITAT. THE REVENUE HAS TRIED T O MAKE OUT A CASE THAT SINCE THE ADDITION WAS MADE PURSUANT TO INFORMATION FROM SALE S TAX DEPARTMENT THIS PENALTY APPEAL FALLS IN THE EXCEPTION CARVED OUT IN THE CBD T CIRCULAR REGARDING APPEALS ARISING OUT OF ADDITIONS MADE PURSUANT TO INFORMATION FROM OUTSIDE AGENCIES. WE ARE OF THE OPINION THAT THIS PLEA IS NOT TENABLE INASMUCH AS O NCE REVENUE ACCEPTS THAT PENALTY IS LEVIED ON OUTSIDE AGENCY INFORMATION THE PENALTY L EVIED WILL HAVE NO LEGS TO STAND. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT W E UPHOLD THE ORDER'S OF LD. CIT(A) AND DELETE THE LEVY OF PENALTY. 6. IN THE RESULT THE REVENUES 'S APPEAL IS DISMISS ED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES 1962 BY PLACING THE DETAILS ON THE NOTICE BOARD ON 09.03.20 21. SD/- SD/- (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 09.03.2021 ROSHANI SR. PS 3 ITA NO. 4919/MUM/2019 (ASSESSMENT YEAR: 2009-10) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR ITAT MUMBAI 6. GUARD FILE BY ORDER (DY./ASSTT. REGISTRAR) ITAT MUMBAI